European Commission Imposes € 38 Million Fine On E.ON For Breach Of A Seal During An Inspection

Jan.30.2008

The European Commission (“Commission”) has imposed a fine of € 38 million on E.ON Energie AG (“E.ON”) for the breach of a Commission seal in E.ON’s premises during an inspection. The seal had been affixed to secure documents collected in the course of an unannounced inspection in May 2006. When the Commission came back the next day, the seal was broken. The inspection formed part of the Commission's enforcement activities against allegations of anti-competitive practices on the German energy markets.

The use of seals is intended to prevent the possibility of evidence being lost during an inspection, thus undermining the effectiveness of the inspection. Breaches of seals are therefore a serious infringement of competition law. In regard to the level of the fine, Council Regulation 1/2003 (Article 23(1) (e)) provides that the Commission can impose a fine of up to 1% of the company's total turnover for a seal broken intentionally or negligently. The European Commission claims, however, that when fixing the amount of the fine it has taken into account the fact that it was the first time that a seal has been broken by a company subject to an inspection and that a fine has been imposed under the provisions of Regulation No. 1/2003 concerning obstruction or interference with a Commission anti-trust investigation.